Palmer v Australian Securities and Investments Commission [2024] FCA 1167
File number(s):
VID 115 of 2024
Judgment of:
BUTTON J
Date of judgment:
8 October 2024
Catchwords:
PRACTICE AND PROCEDURE – abuse of process – permanent stay or dismissal – fragmentation of criminal proceedings – where Applicants seek declaratory and other relief in relation to an examination of the First Applicant, and the transcripts thereof, conducted by ASIC pursuant to s 19 of the Australian Securities and Investments Commission Act 2001 (Cth) – where transcripts used to formulate criminal charges against Applicants – whether this proceeding would inappropriately fragment criminal proceedings – whether proceeding should be stayed or summarily dismissed – held: proceeding stayed pending determination of criminal proceedings
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Palmer v Australian Securities and Investments Commission [2024] FCA 1167
Case
[2024] FCA 1167
Decision Date
CaseChat Overview and Summary
The case of Palmer v Australian Securities and Investments Commission involved the Palmer parties seeking declaratory and other relief in relation to an examination of the first applicant, Mr Palmer, conducted by ASIC under s 19 of the Australian Securities and Investments Commission Act 2001. The transcripts of the examination were used to formulate criminal charges against the Palmer parties. ASIC and the Crown Director of Public Prosecutions sought to set aside and strike out the Palmer parties’ claims, arguing that the proceedings amounted to an abuse of process and fragmentation of criminal proceedings. The matter was initially heard by Ryan J in the Supreme Court of Queensland, who ordered the claims be struck out. The Palmer parties appealed, but the Queensland Court of Appeal dismissed the appeal, finding the claims to be an abuse of process. The relief sought by the Palmer parties in their proceeding against ASIC was for declarations that the examination and its transcripts were unlawful, and that ASIC had unlawfully used the transcripts to formulate criminal complaints. The Palmer parties also sought an injunction to prevent ASIC from using the transcripts in the criminal proceedings and a declaration that the criminal proceedings were invalid.
The primary legal issue before the Court was whether the Palmer parties’ proceeding should be stayed or summarily dismissed as an abuse of process due to the fragmentation of the criminal proceedings. The Court of Appeal held that the Palmer parties’ claims were so clearly bound to fail that they warranted summary termination. The Court noted that the categories of abuse are not closed and that a proceeding can be struck out as an abuse of process if the merits of the claim are untenable. The Court found that the Palmer parties’ claims had little prospect of success and that staying the proceeding was necessary to avoid fragmenting the criminal proceedings.
The Court ordered that the proceeding be stayed pending the final determination of the criminal prosecutions brought against the Applicants, including any appeals. The parties were required to inform the Court of the outcome of the criminal proceedings and the proceeding was listed for a case management hearing. The Court also set timelines for the parties to file and serve submissions on costs. The decision underscores the importance of not fragmenting criminal proceedings and the Court’s power to summarily terminate proceedings that are an abuse of process.
Orders
Orders of the court
1. The proceeding be stayed pending the hearing and final determination, including any appeals, of the criminal prosecutions brought against the Applicants by complaints dated 22 February 2018 (CDPP File Nos. QC16100658 and QC16100658A), or until further order.
2. The parties inform the Court as soon as possible of the determination of the proceedings referred to in paragraph 1.
3. The proceeding be listed for a case management hearing within 14 days of the determination of the proceedings referred to in paragraph 1.
4. There be liberty to apply on three days’ notice.
5. By 4:00pm on 14 October 2024, the parties file and serve any submissions on costs (limited to three pages).
6. By 4:00pm on 17 October 2024, the parties file and serve any responsive submissions on costs (limited to two pages).
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
On 4 December 2018, Ryan J heard ASIC and the CDPP’s applications to set aside, and strike out, the claims and statements of claim filed in Proceedings 10132/18 and 13339/18. On 23 January 2019, her Honour delivered judgment, and ordered that the Palmer parties’ claims (in Proceedings 10132/18 and 13338/18) be set aside and the accompanying statements of claim be struck out: Palmer Leisure Coolum Pty Ltd v Magistrates Court of Queensland [2019] QSC 8. Decisions to strike out and set aside appealed The Palmer parties appealed from the decisions of Ryan J. The appeals were heard by the Queensland Court of Appeal on 4 June 2019. On 17 March 2020, the Court of Appeal (Fraser JA, Morrison JA and Boddice J agreeing) dismissed the appeals with costs: Palmer v Magistrates Court of Queensland (2020) 3 QR 546; [2020] QCA 47 (Palmer Appeal (No 1)). On the appeal, Fraser JA (Morrison JA and Boddice J agreeing) considered that the primary judge had erred in deciding that the Palmer parties’ claims were amenable to summary dismissal pursuant to r 16(e) of the Uniform Civil Procedure Rules 1999 (Qld) on the ground that they amounted to fragmentation of, or interference in, criminal proceedings without addressing whether the claims might succeed if taken to trial. Upon considering the matter afresh, Fraser JA concluded that the Palmer parties’ proceedings had so little prospect of success that they should be summarily terminated as an abuse of process. In explaining Fraser JA’s reasons, a differently constituted bench of the Queensland Court of Appeal, delivering judgment in an appeal in another, later matter in 2024 (Palmer Appeal (No 2) (Dalton JA, Boddice JA and Burns J agreeing)) explained (at [80], [81], [83] and [89]) that:(1)Ryan J struck out the claims pursuant to r 16(e). While the application before the Court also sought a stay under r 16(g), it was accepted in Palmer Appeal (No 1) that nothing turned on Ryan J’s having made orders to strike out the proceedings, rather than stay them.(2)Fraser JA considered that, the Palmer parties having invoked the Supreme Court’s jurisdiction in a regular way, the case could not be struck out or stayed as an abuse of process unless the claims were so clearly bound to fail that they should be summarily terminated.(3)On reconsidering the matter, Fraser JA concluded that the claims were so untenable as to warrant summary termination. One factor that was significant was that, because the jurisdiction to intervene in committal proceedings was so exceptional, it was relatively easy to establish that the case was untenable.(4)Because the categories of abuse are not closed, attracting the principles recognised in GLJ v Trustees of the Roman Catholic Church for the Diocese of Lismore (2023) 414 ALR 635; [2023] HCA 32 (GLJ) — viz, that a permanent stay will not be granted except in exceptional circumstances, because to stay a proceeding deprives the plaintiff of a determination of their claim in accordance with law — the reasoning of Fraser JA “is not to be read as meaning that a proceeding can only ever be struck out as an abuse of process if the merits of the claim are untenable”. Special leave refused
Ratio Decidendi
Legal Principle Established
The relief sought must be understood in light of the claims advanced by the Statement of Claim filed by the Palmer parties in this proceeding. It is sufficient for present purposes to observe that the Palmer parties allege that:(a)the factual context involves the “Palmer Coolum Resort” (formerly the Hyatt Regency Coolum), the timeshare scheme operated by The President’s Club Ltd (TPC) and the ownership and management arrangements of TPC;(b)PLC lodged with ASIC a document outlining a proposed bid for all shares in TPC and the corresponding villa units, but later notified ASIC that it did not intend to proceed with its bid, whereupon ASIC took the position that, pursuant to s 631(1) of the Corporations Act 2001 (Cth) (Corporations Act), PLC could not withdraw its bid;(c)after disputed proceedings before the Takeovers Panel, and proceedings in this Court, on 29 October 2015 ASIC commenced an investigation of the Palmer parties in relation to suspected contraventions of s 631(1) of the Corporations Act and, on 17 May 2016, summoned Mr Palmer to a compulsory interview;(d)the summons issued to Mr Palmer was unlawful, being in contravention of s 49(1) and (4) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act);(e)the examination of Mr Palmer was unlawful;(f)the transcripts of that examination were unlawfully obtained, and any dissemination of the transcripts was unlawful; and(g)ASIC provided the transcripts to the CDPP and used the transcripts to formulate two criminal complaints, referred to as the PLC Complaint and the C Palmer Complaint (which I explain further below), and made unlawful use of the transcripts in using them to draft a summary of facts in connection with the criminal proceedings. Section 49 of the ASIC Act is in the following terms:49 ASIC may cause prosecution to be begun(1) This section applies where:(a) as a result of an investigation; or(b) from a record of an examination;conducted under this Part, it appears to ASIC that a person:(c) may have committed an offence against the corporations legislation; and(d) ought to be prosecuted for the offence.(2) ASIC may cause a prosecution of the person for the offence to be begun and carried on.(3) If:(a) ASIC, on reasonable grounds, suspects or believes that a person can give information relevant to a prosecution for the offence; or(b) the offence relates to matters being, or connected with, affairs of a body corporate, or to matters including such matters;ASIC may, whether before or after a prosecution for the offence is begun, by writing given to the person, or to an eligible person in relation to the body, as the case may be, require the person or eligible person to give all reasonable assistance in connection with such a prosecution.Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).(3A) An offence under subsection 63(3) relating to subsection (3) of this section is an offence of strict liability.Note: For strict liability, see section 6.1 of the Criminal Code.(4) Subsection (3) does not apply in relation to:(a) the person referred to in subsection (1); or(b) a person who is or has been that person’s lawyer.Note: A defendant bears an evidential burden in relation to the matter in subsection (4), see subsection 13.3(3) of the Criminal Code.(5)Nothing in this section affects the operation of the Director of Public Prosecutions Act 1983.